The construction of digital infrastructure, exemplified by China's "Broadband China" policy, has the unintended consequence of increasing corporate borrowing costs. Utilising a quasi-experimental research design, the analysis reveals that this effect is driven by intensified market competition, which elevates firms' risk profiles in the eyes of lenders. The adverse impact is disproportionately borne by non-state-owned enterprises and smaller firms. These findings uncover a critical, previously overlooked channel through which technological progress affects corporate finance, offering essential insights for policymakers and business leaders navigating the digital economy.
